New-Home Sales Post a Strong Rebound
Sales of new single-family homes are climbing, rising 3.5 percent in June to a seasonally adjusted annual rate of 592,000 units, the Commerce Department reported Tuesday. New home sales are up 9.3 percent in the second quarter compared to the first quarter.
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"The fact that new home sales reached their highest pace in over eight years shows the housing market is gaining momentum," says Robert Dietz, chief economist for the National Association of Home Builders. "The market should continue to firm throughout the year, propelled by low mortgage interest rates and solid growth in employment."
The median price of a new home sold in June was $306,700, according to the Commerce Department. Inventories of new homes for sale were at a 4.9-month supply at the current sales pace.
Across the country, new-home sales were up by the numbers in the West, rising 10.9 percent in June over last month, followed by a similar 10.4 percent increase in the Midwest. However, new-home sales dropped 5.6 percent in the Northeast and fell 0.3 percent in the South.
"This positive report is in line with our forecast for a gradual recovery of the housing market," says NAHB Chair Ed Brady. "For builders to meet the increasing demand for housing, we need to address supply-side headwinds such as shortages of lots and labor."
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